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ATO trial points to misuse of auditor numbers

A trial conducted by the ATO found ongoing evidence of tax agents misusing auditor registration numbers to avoid conducting an SMSF audit for their clients.

The ATO conducted the trial with 40 auditors to cross check the funds a particular SMSF auditor said they were auditing against the funds a tax agent said they were auditing, explained Shirley Schaefer, superannuation partner with accounting and advisory network BDO.

Addressing CPA Australia’s SMSF conference in Sydney last week, Ms Schaefer said 50 per cent of the auditors reported being supplied with inaccurate information about the audits they were undertaking.

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In the best case, this may be because a tax agent lodged a tax return before an auditor signed off on an audit, resulting in a timing issue, Ms Schaefer said.

“But there have been, apparently, places where audits weren’t conducted at all. The tax agent has just put the number on the tax return, lodged the form and moved on – and there are tax agents that are doing that,” Ms Schaefer said.

“That’s not the auditor’s fault; we don’t control the tax return, so the ATO is onto this and will be doing some more work around this,” she added.

Ms Schaefer also noted that auditor independence continues to be a focus for the ATO, with a “surprising” number of auditors still having independence issues.

Speaking at the same conference, the ATO’s assistant commissioner, SMSF segment, superannuation, Kasey MacFarlane, stressed that an independent audit is critical to ensuring that trustees are meeting their obligations.

“These audits also inform us and alert us to risks within the sector, allowing us to be on the front foot in engaging with individual SMSFs that are at risk, or not complying with their obligations,” she said.